Is this UK share (which I own) still a top buy after today’s update?

As an owner of Clipper Logistics (LSE: CLG) shares, I was looking ahead to Tuesday’s release of full-year financials. And I’m pleased by what I’ve read today, though the broader market hasn’t been bowled over by the UK share’s latest update.

At 810p per share, the small-cap’s share price was fractionally lower on the day. On a 12-month basis, Clipper is more than 90% more expensive than it was a year ago.

Clipper provides warehousing and logistics services that allow companies to get their goods to their customers. Its doing a roaring trade at of late as the e-commerce sector has boomed. Revenues roared 39.1% higher year-on-year during the 12 months to April, to £500.7m. Profit before tax increased 31.5%, to £28.8m, from a year earlier.

Meanwhile cash generated from operations jumped to £86.9m, up 44% on an annual basis. This, in turn, encouraged Clipper to hike the yearly dividend 14.4% to 11.1p per share.

Clipper Logistics impresses again

Clipper enjoyed “significant organic growth in the period,” it said, growth that was “particularly driven by high e-fulfilment volumes as a result of the permanent structural shift to online.”

Volume growth and contract extensions with retail giants ASOS, John Lewis, Farfetch, and Wilko helped to drive this impressive performance, the firm noted. Outside of e-fulfilment, the company said  it witnessed further organic growth with existing companies such as Morrisons and Asda too.

Last year’s robust performance was underpinned by Covid-19 lockdowns which saw people hop onto their computers to shop. But Clipper Logistics said that it has made “a strong start” to the new financial year, too, with trading in line with the firm’s recently-upgraded guidance. It added that “the Group’s pipeline of new opportunities remains buoyant and further momentum with new contract wins is expected during the year.”

Why I’d still buy this UK share

City analysts think Clipper will rise 30% this year and by an extra 12% in financial 2023. This is perhaps no surprise given that e-commerce still continues to expand at an impressive rate and Clipper keeps on racking up contracts.

eMarketer thinks the internet will account for 37.5% of all UK retail sales in 2021, up from 32.5% last year. It reckons the share of online retail will rise to 38.6% by 2025 as well.

It’s worth remembering however, that this e-commerce play has a great track record of exceeding expectations. I think there’s a good chance current estimates could be positively revised too.

A word of warning though. This share currently carries a forward price-to-earnings (P/E) ratio of 30 times. This sort of premium rating could cause a share price correction if market sentiment towards the business starts to recede.

Signs that e-commerce growth is cooling, or a broader slowdown in consumer spending due to economic conditions, are two things that could pull the Clipper share price lower. But I’d still buy.